South Korea will ease certification standards for asset owners starting next year...Increase the number of companies using the asset liquidation system

In order to encourage the use of the asset liquidation system, the South Korean government will ease the criteria for recognizing asset owners starting next year. On the 27th, the Financial Services Commission decided on a proposal to revise sub-regulations such as the Asset Liquidation Business Supervision Regulations.
Ta. As a result, if a corporation has undergone an external audit and meets the requirements, it will be able to use the asset liquidation system. Until now, in order to utilize the registered securitization system, creditworthiness (rating BB grade or higher), etc.
Asset owner requirements had to be met. In addition, while only some mutual finance central associations and unions were recognized as asset holders, it has now been decided that all central associations and unions will be recognized.
This time, the revisions to the lower-level regulations are intended to specify the matters of delegation based on the amendments to the Asset Securitization Act and Enforcement Order. The revised law and sub-provisions will come into effect on January 12 next year.
Under the proposed amendment, instead of abolishing creditworthiness regulations for asset holders, companies subject to external audits will be required to have assets of 50 billion won or more, capital loss rate of less than 50%, and whose audit opinion is expressed as a fair opinion.
Companies that meet these requirements will be recognized as asset holders. As a result, the number of companies that meet the asset owner requirements has increased approximately 3.8 times from 3,000 to more than 11,000.
It is expected that it will. Regarding asset holders, until now only some mutual finance central associations and associations were stipulated as asset holders, but now all mutual finance central associations and associations are recognized as asset holders.
I met. Regarding registered and unregistered liquidated securities, in order to improve the transparency of the liquidated securities market, an information disclosure obligation has been introduced to require the details of issuance to be made public through the depository and clearinghouse website.
In addition, in order to improve the responsibility of funding entities and the soundness of liquidated securities, we will introduce risk retention obligations for funding entities. A person who has transferred or entrusted assets to a company specializing in liquidation, etc.
and the person who has provided the proceeds generated from the assets through the contract to the liquidation specialist company must hold 5% of the outstanding liquidated securities outstanding.
The Financial Services Commission, together with the Financial Supervisory Service and the Depositary and Clearing Corporation, will ensure that the revised Asset Liquidation Act is smoothly established in the market.
We plan to support them as much as possible.